World's #2 Richest Man gives 85% of $$ to #1 Richest

Warren Buffett gives away his fortune
FORTUNE EXCLUSIVE: The world's second richest man - who's now worth $44 billion - tells editor-at-large Carol Loomis he will start giving away 85% of his wealth in July - most of it to the Bill & Melinda Gates Foundation.

NEW YORK (FORTUNE Magazine) - We were sitting in a Manhattan living room on a spring afternoon, and Warren Buffett had a Cherry Coke in his hand as usual. But this unremarkable scene was about to take a surprising turn.

"Brace yourself," Buffett warned with a grin. He then described a momentous change in his thinking. Within months, he said, he would begin to give away his Berkshire Hathaway fortune, then and now worth well over $40 billion.

This news was indeed stunning. Buffett, 75, has for decades said his wealth would go to philanthropy but has just as steadily indicated the handoff would be made at his death. Now he was revising the timetable.

"I know what I want to do," he said, "and it makes sense to get going." On that spring day his plan was uncertain in some of its details; today it is essentially complete. And it is typical Buffett: rational, original, breaking the mold of how extremely rich people donate money.

Buffett has pledged to gradually give 85% of his Berkshire stock to five foundations. A dominant five-sixths of the shares will go to the world's largest philanthropic organization, the $30 billion Bill & Melinda Gates Foundation, whose principals are close friends of Buffett's (a connection that began in 1991, when a mutual friend introduced Buffett and Bill Gates).

The Gateses credit Buffett, says Bill, with having "inspired" their thinking about giving money back to society. Their foundation's activities, internationally famous, are focused on world health -- fighting such diseases as malaria, HIV/AIDS, and tuberculosis -- and on improving U.S. libraries and high schools.

Up to now, the two Gateses have been the only trustees of their foundation. But as his plan gets underway, Buffett will be joining them. Bill Gates says he and his wife are "thrilled" by that and by knowing that Buffett's money will allow the foundation to "both deepen and accelerate" its work. "The generosity and trust Warren has shown," Gates adds, "is incredible." Beginning in July and continuing every year, Buffett will give a set, annually declining number of Berkshire B shares - starting with 602,500 in 2006 and then decreasing by 5% per year - to the five foundations. The gifts to the Gates foundation will be made either by Buffett or through his estate as long as at least one of the pair -- Bill, now 50, or Melinda, 41 -- is active in it.

Berkshire's price on the date of each gift will determine its dollar value. Were B shares, for example, to be $3,071 in July - that was their close on June 23 - Buffett's 2006 gift to the foundation, 500,000 shares, would be worth about $1.5 billion. With so much new money to handle, the foundation will be given two years to resize its operations. But it will then be required by the terms of Buffett's gift to annually spend the dollar amount of his contributions as well as those it is already making from its existing assets. At the moment, $1.5 billion would roughly double the foundation's yearly benefactions. But the $1.5 billion has little relevance to the value of Buffett's future gifts, since their amount will depend on the price of Berkshire's stock when they are made. If the stock rises yearly, on average, by even a modest amount - say, 6% - the gain will more than offset the annual 5% decline in the number of shares given. Under those circumstances, the value of Buffett's contributions will rise.

Read more here. (no link yet, I closed the window and I'm lazy to find it)

He shoulda donated to me...

I think it's incredible and such a great thing to do. I'm glad that money will go to a good cause, and I applaud Warren Buffett for doing something very humane.

Kudos to him. Would be nice if I had money like that to even consider doing those kinda things.

always nice to heard such news

better late than never

very nice for him to donate few billion bucks. gime some to me

insane amount of money.. god

I like how in real life...people who are filthy rich aren't greedy fuckers. Seems millionaires are the ones with their heads up their asses...but billionaires live in reality.

very nice for him to donate few billion bucks. gime some to me

Try 37 billion (something like that).

Very generous of him to do something like that.

yeah, apparently Bill Gates is donating practically his entire to fortune to charity as well, when he dies that is

37 billion is an insane amount.... can you imagine how many Big Macs that would buy???

about 12 billion.

bill gates must have blackmailed him or something.....

No way man. It goes into the Gates Charity not into Bill Gate's pockets...

Actually, it's a tax dodge, as the Gates family are all paid "salary" by the Gates Foundation. And the Gates Foundation is going to "donate" it to some groups run by Buffet heirs. Don't forget this:

The gifts to the Gates foundation will be made either by Buffett or through his estate as long as at least one of the pair -- Bill, now 50, or Melinda, 41 -- is active in it.

It's legal money laundering. And more support for abolishing the estate tax, among others.

I guess something's fishy when I read the word "Foundation". The Philippines is no exception, big companies here use in-house foundations for tax-dodging.
Average people want to be millionaires.
Millionaires want to be trillionaires.
Trillionaires just want to keep their money.

Considering there are no trillionaires, they musn't be very good at it.

Indeed they are. Maybe they changed their minds and gave it to charity like that Warren Buffet chump.


2 questions:

What's the difference between a millionaire and a multi-millionaire? If you have 2-10 million bucks does that make you a multi-millionaire? I don't get it.

If any of you has 44 billion, how would you spend all of it? (Giving it away to charity doesn't count. Bling-blings are very much preferred.)

I think a person who has 1 million is considered a millionair, a mutli millionair is someone who has 1+ million.

I'd buy myself an amusement park full of go karting karts.

I'd also look to finance an Archie movie.

that is alot of money..its good of him to donate all of that money..but man it says it improves the US' schools and libraries..what about canada
oh well atleast it helps the drug things but does any of this go to cancer? i think cancer is more important because with this much money i think they will have the cure to cancer in one day..oh well i guess he wants to be a hero of his country not world-wide...its still a nice thing to do considering how rich people dont usually give up money easily without a fight..

wow

but this is weird. bill gates is richer than this guy. so howcome this guy is giving his money to the gates foundation? why doesnt he make his own foundation? yes i know they are friends but..

hes old and might die soon maybe is why.

yes but im saying its just weird..he could have started his own foundation :p

oh well i guess he and gates are very good friends..since they are both so rich

So whoever has 1million and 1cents is a multi millionaire..........ooookaaay....